IFRS9 COMPLIANCE – WAVE II

R&C: In broad terms, how would you describe the way International Financial Reporting Standards 9 (IFRS9) has impacted banks across the globe since it became effective on 1 January 2018?

Rocha: In broad terms, we can say the impact is twofold. On one side, we have the impact on the numbers. The provisions are now being calculated under a new set of rules, and the expectation was for those provisions to spike on the date of adoption. Apparently, after talking with a few banks all around the world, it appears they did not spike that much for the majority of banks. On the other side, the new set of rules required a new system to support the calculations and automate them. Here, the market is divided between those organisations which invested in a completely new system and struggled to have it ready on time, and the others which opted for existing systems yet, interestingly, largely struggled to be ready on time as well.

R&C: With real-time data (RTD) now available for analysis for the first time, what do the results tell us about the effectiveness of banks’ IFRS9 implementation efforts, the impact the standard has had on banking systems and the success of the rollout so far?

Rocha: In one way or another, every bank subjected to IFRS9 has implemented it and was ready by the deadline. The forms and shapes vary quite a lot. Some banks have invested in bespoke systems designed to help banks adopt IFRS9. In general, those banks are now in better shape.